County presses for answers on $300,000 in travel costs

Ethics issue raised in law firm's hiringHarris County judge questions attorneys' role in bond sales now being probed

MIKE MORRIS, HOUSTON CHRONICLE

Published 5:30 am, Tuesday, July 12, 2011

Harris County Judge Ed Emmett pointedly questioned the hiring of law firm Greenberg Traurig to advise the county on a bond sale at Commissioners Court on Tuesday, calling the firm's efforts to entertain a former county employee ethically dubious.

Greenberg is one of five law firms that recently repaid the county more than $300,000 in unsupported travel expenses associated with 30 bond sales from 2006 through 2009.

Records show former county finance chief Edwin Harrison traveled in connection with 17 of those sales, often with Greenberg partner Franklin Jones. Industry experts say lawyers serve no business purpose on such trips.

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Harrison gave Greenberg the largest or second-largest share of the county's financial legal work in each of the last five years, records show. He also wrote up to $25,000 for expenses into the firms' contracts. They were never asked to show receipts.

"Why do you think that this one firm is so important to this particular transaction … in light of all the information that is circling around out there?" Emmett asked County Attorney Vince Ryan, whose office took over selecting bond counsel last fall as a result of several probes of Harrison's office.

Ethics, Emmett noted, is among the county attorney's key areas of focus.

"They're the best qualified to ensure the county gets the best deal in this particular transaction," Ryan said, adding that all financial disputes between the firm and the county have been settled.

Emmett's questioning drew the ire of some commissioners, who outvoted him 4-1 to accept Ryan's recommendation and hire the firm.

"We assigned the county attorney to give you the information that you asked for and now you're going to throw it back," Commissioner Jerry Eversole said. "We might as well not have them do it and let you do it."

Of particular concern to Emmett was a bond pricing trip Harrison, Jones and others took to New York City Dec. 4-9, 2009.

While traveling to New York to visit his son, Emmett said he passed Harrison, Jones and their wives in first class as he walked to coach with his wife.

"Does it make any difference that it was first class or coach?" Commissioner El Franco Lee interrupted. "You're that interested in what class a person would fly?"

The judge said Jones later told him his firm had paid for meals and drinks on the trip and that he believed bankers from Goldman Sachs, who also were involved in the deal, paid for a luxury box at an NFL game that weekend. Emmett said he was told it was a Jets game, but schedules show the Giants were home that Sunday, not the Jets.

Emmett said that when he returned from New York, he asked Harrison's boss, longtime budget director Dick Raycraft, to produce documentation showing who had paid for the trip.

Harrison has no comment

The documents, which he received a year later, showed Harrison had stayed at the W Hotel on Times Square, paying for two nights himself and charging three to the county. Other county representatives also stayed at the hotel. Raycraft explained the delay by saying the paperwork "was in the auditor's office for a while."

He said Harrison upgraded to first class for free using airline miles.

Harrison, who retired last month, declined comment Tuesday. Probes of his conduct by county auditors are ongoing. The FBI also is investigating Harrison and investments he made that allegedly resulted in $1.14 million in overpayments to two brokers in the past six years.

Jones did not return calls seeking comment.

"We are confident that our lawyers acted appropriately and in compliance with applicable standards," said Lourdes Brezo Martinez, spokeswoman for Greenberg Traurig. "We are pleased that the county recognizes this and has given us the opportunity to continue to provide legal services for its bond issuances."

Generalities, specifics

Emmett's willingness to discuss the trip clearly bothered Ryan, Lee and Commissioner Jerry Eversole, all of whom said it was inappropriate to air such concerns in public.

Ryan said he should not comment on Emmett's ethics questions in generalities. When Emmett attempted to raise a particular concern, however, Ryan said specifics should be discussed only in closed, executive session.

After the meeting, Lee said Emmett was "guessing" and "using second-hand information." The matter, he said, should be left to the auditor, budget office, county attorney and district attorney.

County on credit watch

"An AAA bond rating is not achieved by wining and dining frivolously. We can make that sound real trite, and a real big party, for people that's on the street and don't understand how and why financial decisions are made," Lee said. "It's highly technical. When you start airing those things out, bond rating people will begin to look at this system as a whole and they'll start to say, 'Something's going on in Harris County.' "

Moody's Investors Service placed Harris County on credit watch for a possible downgrade June 23, noting the county's depleted reserves. Moody's said it would study whether to downgrade the county for 90 days.